Lowering the tax rate levied on Canada’s small businesses would help increase employment numbers, according to a national association of small and medium-sized enterprises.
On the heels of a recent meeting with federal Finance Minister Jim Flaherty, the Canadian Federation of Independent Business (CFIB) issued a statement which said that dropping the small business tax rate from 11 per cent to nine per cent – beginning with a 0.5 per cent decrease this year – would help get the federal government’s job numbers “back on track.”
“The latest job numbers show how fragile our economy continues to be,” CFIB president Dan Kelly said in a statement. “Small business can be a big part of the solution, but needs government to help create the right environment for growth.”
In addition to dropping the small business tax rate, another key budget priority offered to Flaherty was recognizing the costs of on-the-job training done by small business by retaining the Hiring Credit for Small Business – an incentive that gives business owners a tax break equivalent to additional employment insurance that come with new hires; the program also applies to businesses who boost their workers’ salaries.
A third recommendation was to address public sector pension liabilities. “Some options include converting new hires from defined benefit plans to defined contribution (or a shared risk model); and eliminating early retirement for all current government employees (not just new employees),” the CFIB said.
Flaherty is expected to deliver the Conservative government’s budget in March.
The Toronto-based CFIB is a not-for-profit, non-partisan, business advocacy organization that represents 109,000 small- and medium-sized business owners to all levels of government across Canada.